JubLife NB

8/10/2019 JubLife NB

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Institutional Equities

2 Jubilant Life Sciences

Exhibit 1: Financial summary

Y/E March (Rsmn) FY13 FY14 FY15E FY16E FY17E

Revenue 51,610 57,984 57,567 66,719 75,305

YoY (%) 19.9 12.4 (0.7) 15.9 12.9

EBITDA 10,495 9,984 6,207 9,460 11,357

EBITDA (%) 20.3 17.2 10.8 14.2 15.1

Reported PAT 1,527 1,127 160 2,346 3,668

Adj. PAT 3,824 3,347 160 2,346 3,668

YoY (%) 5.0 (12.5) (95.2) 1,362.6 56.4

Fully DEPS 9.6 7.1 1.0 14.7 23.0

Adj. EPS 24.0 21.0 1.0 14.7 23.0

RoE (%) 15.9 13.1 0.6 8.8 12.6

RoCE (%) 12.1 10.7 4.8 9.5 11.9

P/E (x) 17.2 23.3 163.9 11.2 7.2

EV/EBITDA (x) 5.8 5.8 9.3 6.2 5.1

Source: Company, Nirmal Bang Institutional Equities Research

Exhibit 2: Revenue summary

Revenue break-up (Rsmn) 2QFY14 1QFY15 2QFY15 YoY (%) QoQ (%)

Pharmaceuticals 6,930 6,040 6,140 (11.4) 1.7

Life science ingredients 7,440 8,690 7,570 1.7 (12.9)

Total 14,370 14,730 13,710 (4.6) (6.9)

EBITDA (Rsmn)

Pharmaceuticals 1,760 360 690 (60.8) 91.7

Life science ingredients 1,250 1,330 620 (50.4) (53.4)

Less: Corp. expenses (250) (190) 60 (124.0) (131.6)

Total* 2,760 1,500 1,370 (50.4) (8.7)

EBITDA margin (%)

Pharmaceuticals 25.4 6.0 11.2 (1,420bps) 520bps

Life science ingredients 16.8 15.3 8.2 (860bps) (700bps)

Total * 19.2 10.2 10.0 (920bps) (20bps)

(*) Includes other income


Exhibit 3:

Actual performance versus our estimates, Bloomberg consensus estimates

Particulars (Rsmn) Actual Our estimates Variation (%) Bloomberg cons.est. Variation (%)

Revenue 13,711 14,933 (8.2) 15,440 (11.2)

EBITDA 1,110 1,823 (39.1) 2,023 (45.1)

EBITDA margin (%) 8.1 12.2 (410bps) 13.1 (500bps)

Reported PAT (941) 219 NA 450 NA

Adjusted PAT (987) 219 NA 450 NA

Source: Bloomberg, Company, Nirmal Bang Institutional Equities Research

Exhibit 4: Change in our FY15/FY16 earnings estimates

FY15E FY16E

(Rsmn) Old New Change (%) Old New Change (%)

Revenue 63,579 57,567 (9.5) 72,169 66,719 (7.6)

EBITDA 9,394 6,207 (33.9) 11,979 9,460 (21.0)

EBITDA margin (%) 14.8 10.8 (400bps) 16.6 14.2 (240bps)

Adjusted PAT 2,763 160 (94.2) 4,532 2,346 (48.2)

Source: Nirmal Bang Institutional Equities Research





Financials

Exhibit 5: Income statement


Net sales 51,610 57,984 57,567 66,719 75,305

% growth 19.9 12.4 (0.7) 15.9 12.9

Raw material costs (20,500) (24,421) (26,422) (29,753) (32,870)

Staff costs (9,622) (11,052) (11,242) (13,025) (14,717)

Other expenses (10,732) (12,527) (13,696) (14,480) (16,360)

Forex loss (260) - - - -

Total expenditure (41,115) (47,999) (51,360) (57,259) (63,947)

EBITDA 10,495 9,984 6,207 9,460 11,357

% growth 18.3 (4.9) (37.8) 52.4 20.1

EBITDA margin (%) 20.3 17.2 10.8 14.2 15.1

Other income 289 200 500 400 500

Interest costs (2,537) (3,044) (3,265) (3,026) (3,041)

Gross profit 8,246 7,141 3,442 6,834 8,816

% growth 20.5 (13.4) (51.8) 98.6 29.0

Depreciation (2,538) (2,812) (2,991) (3,248) (3,428)

Exceptional items (2,297) (2,220) - - -

Profit before tax 3,411 2,110 450 3,586 5,388

Tax (1,524) (696) (90) (897) (1,347)

Effective tax rate (%) 44.7 33.0 20.0 25.0 25.0

Net profit 1,888 1,413 360 2,690 4,041

% growth 313 (25) (74) 646 50

Minority interest (361) (286) (200) (345) (375)

Reported net profit 1,527 1,127 160 2,346 3,668

% growth 948.8 (26.2) (85.8) 1,362.0 56.4

Adjusted net profit 3,824 3,347 160 2,346 3,668

% growth 5.0 (12.5) (95.2) 1,362.6 56.4


Exhibit 7: Balance sheet


Equity 159 159 159 159 159

Reserves 24,784 26,111 25,717 27,506 30,617

Net worth 24,944 26,270 25,876 27,665 30,776

Short-term loans 9,188 11,588 11,588 11,588 11,588

Long-term loans 28,721 24,977 24,688 22,030 22,205

Total loans 37,909 36,565 36,276 33,618 33,793

Deferred tax liability 2,740 2,371 2,371 2,371 2,371

Minority interest 1,115 1,579 1,579 1,579 1,579

Liabilities 66,707 66,785 66,102 65,234 68,519

Gross block 68,701 72,201 76,701 81,201 85,701

Depreciation 19,027 21,839 24,830 28,078 31,506

Net block 49,675 50,363 51,872 53,123 54,195Capital work-in-progress 4,369 5,349 4,349 3,349 2,349

Long-term Investments 256 340 340 340 340

Inventories 11,149 13,418 12,977 15,035 16,988

Debtors 7,100 8,067 8,286 9,601 10,848

Cash 3,560 4,795 4,813 1,161 2,289

Other current assets 7,701 6,282 6,261 7,117 7,929

Total current assets 29,510 32,562 32,337 32,914 38,053

Creditors 10,562 13,808 14,775 16,472 18,396

Other current liabilities 6,549 8,026 8,026 8,027 8,027

Total current liabilities 17,112 21,834 22,801 24,499 26,423

Net current assets 12,399 10,728 9,536 8,415 11,630

Other non-current assets 9 6 6 6 6

Total assets 66,707 66,785 66,102 65,234 68,519


Exhibit 6: Cash flow


EBIT 7,957 7,173 3,215 6,212 7,929

(Inc.)/dec. in working capital (554) 2,008 1,209 (2,531) (2,087)

Cash flow from operations 7,403 9,180 4,424 3,680 5,843Other income 289 200 500 400 500

Depreciation 2,538 2,812 2,991 3,248 3,428

Interest paid (-) (2,537) (3,044) (3,265) (3,026) (3,041)

Tax paid (-) (1,524) (696) (90) (897) (1,347)

Dividends paid (-) (555) (559) (554) (554) (555)

Minority interest (-) (361) (286) (200) (345) (375)

Net cash from operations 5,253 7,607 3,806 2,507 4,452

Capital expenditure (-) (5,374) (4,480) (3,500) (3,500) (3,500)

Net cash after capex (121) 3,127 306 (993) 952

Inc./(dec.) in short-term borrowing 1,517 2,400 - - -

Inc./(dec.) in long-term borrowing (1,787) (3,743) (289) (2,658) 175

Inc./(dec.) in borrowings (269) (1,343) (289) (2,657) 176

(Inc.)/dec. in investments (64) (84) - - -

Cash from financial activities (334) (1,427) (289) (2,657) 176

Others 1,343 (465) - - -

Opening cash 2,672 3,560 4,795 4,813 1,161

Closing cash 3,560 4,795 4,813 1,161 2,289

Change in cash 889 1,235 17 (3,651) 1,128


Exhibit 8: Key ratios Y/E March FY13 FY14 FY15E FY16E FY17E

Per share (Rs)

Reported EPS 9.6 7.1 1.0 14.7 23.0

Adjusted EPS 24.0 21.0 1.0 14.7 23.0

DPS 3.0 3.0 3.0 3.0 3.0

BV/share 156.6 164.9 162.4 173.7 193.2

Dividend payout (%) 14.5 16.6 345.7 23.6 15.1

Performance ratios

RoE (%) 15.9 13.1 0.6 8.8 12.6

RoCE (%) 12.1 10.7 4.8 9.5 11.9

Valuation ratios

P/E (x) 17.2 23.3 163.9 11.2 7.2

P/BV (x) 1.1 1.0 1.0 1.0 0.9

EV/net sales (x) 1.2 1.0 1.0 0.9 0.8

EV/EBITDA (x) 5.8 5.8 9.3 6.2 5.1

Efficiency ratios

Asset turnover (x) 0.8 0.9 0.9 1.0 1.1

Working capital/sales (x) 0.23 0.17 0.15 0.17 0.18

Receivable days 50 51 53 53 53

Inventory days 79 86 83 83 83

Payable days 94 105 105 105 105






Rating trackDate Rating Market price (Rs) Target price (Rs)

20 May 2013 Buy 159 257

9 July 2013 Buy 119 257

5 August 2013 Buy 90 160

7 October 2013 Buy 83 160

30 October 2013 Buy 101 1606 December 2013 Buy 126 156

7 January 2014 Buy 127 156

7 February 2014 Buy 132 168

27 May 2014 Buy 186 226

10 July 2014 Buy 193 226

6 August 2014 Sell 197 171





Disclaimer

Stock Ratings Absolute Returns

BUY > 15%

ACCUMULATE -5% to15%

SELL < -5%

This report is published by Nirmal Bang’s Institutional Equities Research desk. Nirmal Bang has other business units with independent research teams separated byChinese walls, and therefore may, at times, have different or contrary views on stocks and markets. This report is for the personal information of the authorisedrecipient and is not for public distribution. This should not be reproduced or redistributed to any other person or in any form. This report is for the general informationfor the clients of Nirmal Bang Equities Pvt. Ltd., a division of Nirmal Bang, and should not be construed as an offer or solici tation of an offer to buy/sell any securities.

We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it relates to current and historicalinformation, but do not guarantee its accuracy or completeness. The opinions expressed are our current opinions as of the date appearing in the material and may besubject to change from time to time without notice.

Nirmal Bang or any persons connected with it do not accept any liability arising from the use of this document or the information contained therein. The recipients ofthis material should rely on their own judgment and take their own professional advice before acting on this information. Nirmal Bang or any of its connected personsincluding its directors or subsidiaries or associates or employees or agents shall not be in any way responsible for any loss or damage that may arise to any person/s

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Dealing

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Pradeep Kasat Dealing Desk [email protected] +91 22 3926 8100/8101, +91 22 6636 8831

Michael Pillai Dealing Desk [email protected] +91 22 3926 8102/8103, +91 22 6636 8830

Umesh Bharadia Dealing Desk [email protected] +91-22-39268226

Nirmal Bang Equities Pvt. Ltd.

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JubLife NB